Vale adopts cautious, optimistic approach amid U.S. tariff uncertainty, focusing instead on operations

Playing null of undefined

Mining giant Vale focusing on safety and production

CTV News speaks with Vale's Gord Gilpin

Vale Base Metals is taking a cautious approach to the potential imposition of U.S. tariffs on nickel and other critical minerals, opting to prioritize operational stability and safety while monitoring the evolving trade landscape.

Gord Gilpin, Director of Ontario Operations for Vale Base Metals, addressed the issue Wednesday following his keynote address at the Sudbury Chamber of Commerce’s President’s Series Luncheon. He described the tariff situation as a “concerning distraction” but emphasized the company’s commitment to maintaining safe and reliable operations.

“Right now, we’re staying focused on operating. This is definitely a concerning distraction in the background,” Gilpin told reporters following his speech.

“We’re getting ready for any potential things that may happen, but at this point, the way things have been fluctuating, the best thing we can do is stay focused on operating safely and we’ll see how things go.”

The comments come after Ontario Premier Doug Ford stated earlier this month that the province is prepared to respond to any U.S. tariffs, highlighting the importance of Sudbury’s high-grade nickel to global markets, including the U.S. military and manufacturing sectors. Ford asserted that if necessary, Ontario would stockpile nickel and sell it elsewhere.

Gilpin acknowledged the uncertainty surrounding U.S. trade policies but said Vale is preparing for various scenarios.

“It’s certainly something that we’re working on. We have people working in the background, but there is such a lack of clarity on where things may go,” he said.

The potential tariffs could also impact the electric vehicle battery market, a key driver of nickel demand. Vale signed a supply agreement with Tesla in 2022, but Gilpin noted it is difficult to predict how the current trade volatility might affect such deals.

“It’s something we’re concerned about. It’s something that we’re looking at, thinking about,” he said. “

But until we get through this period of volatility, it’s kind of impossible to predict where that’s going to go.”

Diverse production and market challenges

During his address on March 19, Gilpin highlighted the diversity of Vale’s Ontario operations, noting that only 50 per cent of its production is nickel. The remaining output is about 25 per cent copper and 25 per cent is a mix of gold, silver, cobalt, and platinum group metals.

Despite this diversity, Vale has faced challenges in the nickel market, where prices have been down, which Gilpin described as “a challenge.” As of the close of markets on Friday, nickel was trading at about $16.21 (U.S.) per kilogram. However, he expressed optimism about long-term demand, particularly from the stainless steel and EV sectors.

“We are concerned, but at the same time, I think we’re blessed with a great endowment, a pro-mining community,” Gilpin said.

“But the reality is the world is changing with the amount of nickel that’s coming on the market, and we’ve got to stay competitive.”

To address these challenges, Vale has made workforce adjustments in Sudbury, including recent layoffs of non-union employees. Gilpin did not specify the number of jobs cut but indicated that further layoffs could not be ruled out as the company seeks to streamline operations - however, he did indicate that the company’s operations have, for now, reached “a business as usual” state.

Exploration and future plans

Looking ahead, Gilpin outlined Vale’s plans to invest up to $100 million in exploration over the next few years, with 10 surface drills and 14 underground drills set to begin operations in 2025. He conveyed confidence in the Greater Sudbury’ area’s mining potential, even suggesting the region could support another century or more of mining activity.

Gilpin also provided updates on several local projects, including the new Stobie open pit mine, the expansion of the Copper Cliff mine, and the planned dismantling of the iconic 381-metre Copper Cliff Superstack. The smokestack, decommissioned in 2020 due to reduced sulphur emissions, is slated for removal starting this summer.

“It’s a very meaningful, very important symbol for Sudbury, but it doesn’t make sense to keep it standing,” Gilpin said, noting the significant costs associated with maintaining the structure.

Despite current market challenges, Gilpin told the chamber and reporters that he remains optimistic about the future, predicting a balance in the nickel market within five years.

“We’re going through a period where there’s more nickel than the world really needs at this moment. But down the road, things will start to turn around,” he said.